Correlation Between Tri-County Financial and United Bancorporation
Can any of the company-specific risk be diversified away by investing in both Tri-County Financial and United Bancorporation at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tri-County Financial and United Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tri County Financial Group and United Bancorporation of, you can compare the effects of market volatilities on Tri-County Financial and United Bancorporation and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tri-County Financial with a short position of United Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tri-County Financial and United Bancorporation.
Diversification Opportunities for Tri-County Financial and United Bancorporation
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tri-County and United is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tri County Financial Group and United Bancorp. of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bancorporation and Tri-County Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tri County Financial Group are associated (or correlated) with United Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bancorporation has no effect on the direction of Tri-County Financial i.e., Tri-County Financial and United Bancorporation go up and down completely randomly.
Pair Corralation between Tri-County Financial and United Bancorporation
Given the investment horizon of 90 days Tri-County Financial is expected to generate 13.09 times less return on investment than United Bancorporation. But when comparing it to its historical volatility, Tri County Financial Group is 1.37 times less risky than United Bancorporation. It trades about 0.03 of its potential returns per unit of risk. United Bancorporation of is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 5,399 in United Bancorporation of on August 25, 2024 and sell it today you would earn a total of 501.00 from holding United Bancorporation of or generate 9.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tri County Financial Group vs. United Bancorp. of
Performance |
| Timeline |
| Tri County Financial |
| United Bancorporation |
Tri-County Financial and United Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tri-County Financial and United Bancorporation
The main advantage of trading using opposite Tri-County Financial and United Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tri-County Financial position performs unexpectedly, United Bancorporation can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in United Bancorporation will offset losses from the drop in United Bancorporation's long position.| Tri-County Financial vs. Standard Bank Group | Tri-County Financial vs. PSB Holdings | Tri-County Financial vs. United Overseas Bank | Tri-County Financial vs. Turkiye Garanti Bankasi |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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